S&P Global Ratings maintained Link Real Estate Investment Trust's (HKG:0823) A long-term issuer credit rating and long-term issue ratings on its senior unsecured bonds, according to a Monday release.

The rating agency expects the REIT to navigate ongoing challenges in the Hong Kong retail market with its solid market position in the nondiscretionary retail sector, expanding overseas assets, and reduced gearing ratio after a rights issue earlier last year.

An economic slowdown, cross-border shopping, and rising online sales have added to pressures on Hong Kong's retail sector, in turn adversely impacting landlords, S&P said.

The rating agency expects the trust to record negative rental reversions in its Hong Kong retail malls in the next two years, while its occupancy will stay strong between 96% and 97%.

Link REIT has been acquiring retail assets in Singapore and mainland China, which should increase its revenue streams and mitigate its weak Hong Kong retail mall position.

S&P believes the REIT will keep its disciplined approach in acquisitions for the next 12 months, with co-investment with capital partners, to ease some of the investment burden.

The outlook is stable, reflecting S&P's view that the REIT will keep solid metrics including market position, profitability, and recurring income in the next one to two years.

Substantial changes in the company's debt-to-EBITDA ratio and gearing ratio could trigger future rating actions, although a rating upside is limited in the next 12 to 24 months, S&P said.